“Helping Smart People to Think Clearly About Their Business and Competitive Strategy”

I chose that phrase because it captures what fascinates me about people and challenges that they face. There are a lot of smart people in the business. Experts at technology, manufacturing processes, financial models and so much more inhabit the corporate world. Yet, these smart people sometimes get “stuck” when they work outside their expertise.

In the high technology industries that I am most used to it is a merit badge of sorts to be considered “smart.” Knowing facts, solving problems that others struggle with, completing tasks faster are things that separate smart people from the crowd. Over time this helps increase the confidence that the same smart people feel about their capabilities.

With so many smart people, we might expect strategies that are well considered and implemented. Many people that I speak with tell me that this is not the case for their companies.

So why aren’t business and competitive strategies better?

There are two reasons that I have observed in nearly thirty years of work.

Most people are tactically oriented.

By the way, this is not a criticism. Most people need to be tactical since business is conducted in small steps by many people that are assigned specific tasks. The tasks might be simple but they are often quite complex. This requires smart people who honorably perform.

The problem occurs when tactical thinking and actions dominate strategic ones. When circumstances (e.g., economic pressures, financials) or plans create an imbalance, it is often the strategic side which loses. This causes leadership to narrow its views and the organization responds by doing the same thing. The result is that strategies are ill-formed, poorly communicated or simply ineffective.

Businesses run into problems when they do not balance tactical and strategic issues. The usual indication that there is an imbalance is the neglect of strategy and strategic thinkers.

It’s a different kind of smart.

I am the third of four sons. When I was in high school, my next older brother and I were often compared to each other by our mutual friends. The teenage years are not always the kindest of times and the point of most of the comparisons was to contrast my academic performance to his. Since I was a good student (and he preferred working on his car), he usually “lost” these contests. One day, a friend was trying the same routine and tried to get me to say that I was smarter than my brother. In an unusual moment of teenage wisdom, I told this friend the truth. If you wanted grades, yes, come to me. If you were broken down on the side of the road, then the smarter person (by far) would be my brother. You see, he had a “different kind of smart.”

Strategists have a different kind of smart from most people. It is not better or worse, it’s just different. It requires a thought process that is simultaneously broad while being grounded in the day-to-day realities of a business. It is visionary yet concerned about how the strategy will be implemented effectively. And, it paints a grand picture of the future but requires skill to lead an organization through changes.

The biggest problem that business leaders sometimes have is the honest self assessment of their strategy thinking capabilities. Many are brilliant and hard working people. They have climbed the corporate ladder only to find that what is required at the top differs from what was needed along the way. The transition from the tactical concerns to the strategic issues requires the “different kind of smart” that is not natural or practiced for them.

The prescription is straightforward.

Intentionally define the balance that you need between the tactical and strategic. You will have to protect this balance over time because there will be pressures that pull in both directions.

Find the people that are smart about strategy. Nurture them. Challenge them. Integrate them into the tactical discussions so that they remain grounded.

Do you agree? What other impediments do you see to good business and competitive strategy?

3 comments until now

I greatly enjoy reading your blog posts; they are well written, enlightening, and really fun to read.

In addition, I agree with all of your observations.

Two additions I would add from my 30 years of experience:

1) Most business executives are very smart as individuals – but companies and internal organizations of are not. (I also believe the same is true in politics where individual politicians are generally smart people, but political organizations operate in ways that do not highlight smarts. Individual intelligence can sometimes be measured across many areas. We need a better way to measure the intelligence of Groups.)

2) In your sentence that begins with “The biggest problem that business leaders sometimes have is…” my view on how to complete that thought is:
The biggest problem business leaders have is they do not have a global game board for discussing the global economy in which they operate. Government industry classification systems do not work for most business professionals; and most information companies provide industry sector information at too high a level for most line-of-business managers to. Discussing strategies without a context game board is very hard.

(To address the above, eCompetitors.com has spent the last eight years building what might be the first global game board developed at the line-of-business level for the Top 10,000 industries.)